BEIJING (Reuters) – Chinese banks extended 1.84 trillion yuan ($274.91 billion) in net new yuan loans in June, up considerably within the previous month and beating analysts' expectations, as policymakers increase support for that economy.

Faced with a slowdown in domestic demand additionally, the potential fallout originating from a trade war using the United States, Chinese policymakers have boosted policy support and softened their stance on deleveraging.

Analysts polled by Reuters had predicted new June yuan loans of 1.6 trillion yuan, significantly greater than May's 1.15 trillion yuan. China's banks extended a list 13.53 trillion yuan in new loans in 2009.

Broad M2 money supply grew 8.0 percent in June originating from a year earlier, central bank data showed on Friday, missing forecasts on an expansion of 8.3 percent and compared with 8.3 percent in May.

June's M2?growth was the?lowest?since at the very least January 1996, when Reuters data on the series began.

The People's Bank of China says a slowdown in M2 growth generally is a "new normal" on account of official deleveraging efforts during the overall economy.

Outstanding yuan loans in June grew 12.7 percent coming from a year earlier, faster than an expected 12.Five percent and almost the same as May's 12.6 percent rise.

Household loans, mostly mortgages, rose to 707.3 billion yuan in June from 614.3 billion yuan in May, in accordance with the central bank's data.

Household loans landed 38.4 percent of total new loans in June, versus 53.4 % in May.

Corporate loans rose to 981.9 billion yuan in June from 525.5 billion yuan 30 days earlier.

FEELING THE PINCH

The world's second-largest economy has now felt the pinch with a multi-year campaign to lessen debt risks, specially in the financial system, who has driven up corporate borrowing costs.

A recent Reuters poll showed China's gross domestic product growth was most likely to ease marginally to.7 percent from the second quarter coming from a year earlier, compared to the 6.8 percent observed in the previous 75 %.

Second quarter GDP data will be released on Monday.

Last month, China's central bank announced its third reserve requirement ratio cut this year, releasing 700 billion yuan in liquidity, so that you can accelerate the pace of debt-for-equity swaps and spur lending to smaller firms.

China's financial regulator has told banks to "significantly cut" lending rates for small firms inside the third quarter when compared with the main quarter, two sources with direct information about the matter told Reuters on Monday.

China's total social financing (TSF), an extensive measure of credit and liquidity for the overall design, rose sharply to just one.18 trillion yuan ($176.30 billion) in June from 760.8 billion yuan in May, central bank data showed.

TSF includes off-balance sheet different types of financing that you can get beyond your conventional bank lending system, like initial public offerings, loans from trust companies and bond sales.

That can provide hints of activity in China's vast and unregulated shadow banking sector, which authorities are also targeting for their campaign to lessen systemic risks.